This excerpt taken from the WOOF 10-K filed Mar 1, 2007.
f. Property and Equipment
Property and equipment is recorded at cost. Equipment held under capital leases is recorded at the lower of the present value of the minimum lease payments or the fair value of the equipment at the beginning of the lease term.
We develop and implement new software to be used internally, or enhance our existing internal software. We develop the software using our own employees and/or outside consultants. Costs associated with the development of new software are expensed as incurred. Costs related directly to the software design, coding, testing and installation are capitalized and amortized over the expected life of the software. Costs related to upgrades or enhancements of existing systems are capitalized if the modifications result in additional functionality.
VCA ANTECH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Depreciation and amortization are recognized on the straight-line method over the following estimated useful lives:
Depreciation and amortization expense, including the amortization of property under capital leases, in 2006, 2005 and 2004 was $18.6 million, $16.1 million and $13.4 million, respectively.
Property and equipment at December 31, 2006 and 2005 consisted of (in thousands):
Accumulated amortization on buildings held under capital leases amounted to $695,000 and $191,000 at December 31, 2006 and 2005, respectively, and accumulated amortization on equipment held under capital leases amounted to $128,000 and $75,000 at December 31, 2006 and 2005, respectively.